CROPS & FUEL
With the summer already two-thirds over and the dog days of August about to seep in, I’ll bet you didn’t notice that:
- About the time-troubled New York lender CIT Group started coughing up blood two weeks ago. A trustee for one of its former clients, Meadowbrook Farms Cooperative, was alerting a federal bankruptcy judge in East St. Louis, Ill., of an offer to dump most of the busted Illinois pork packer.
Recall that Meadowbrook took the Chapter 7 swim in mid-March, pulling nearly 200 Midwestern hog farmers underwater with it? At the time, it listed $28 million in assets and $44 million in red ink; $6 million of it owed to CIT.
On July 10 the Meadowbrook’s bankruptcy trustee filed notice that she intends to sell “certain of the Debtor’s real estate” – the land and kill plant near Rantoul, Ill. – and much of the co-op’s “machinery, equipment and fixtures” for nearly $14.9 million.
The buyer is the bank, Stearns Bank, N.A., St. Cloud, Minn., that Meadowbrook owes – surprise! – $14,8 million.
So while Stearns gets a slightly used Illinois pork plant and Meadowbrook sees its largest asset dropped from its unbalanced balance sheet, CIT and the co-op’s members will get a fat thumb in their eyes.
- Greg Burns’ July 16, Chicago Tribune column on “The Informant,” the about-to-be released, Hollywood movie on the 1990s price-fixing scandal at Archer Daniels Midland. Scheduled for general distribution Oct. 9, the movie, centering on ADM wonderboy-turned-FBI mole Mark Whitacre, features mega-star Matt Damon in the lead role.
The movie trailer, which is viewable on the web but, interestingly, best at Mark Whitacre’s personal Web site, (www.markwhitacre.com), has a cartoonish story line about a bumbling informant who, despite himself, gift wraps and hands the FBI its biggest corporate criminal ever.
Whitacre, recall, later went to prison after admitting the embezzlement of millions from the ag processor even as he was audio and video taping the price fixers at work.
Reached by telephone July 22, Whitacre noted that both he and wife Ginger recently screened the completed film and “both thought it very entertaining.”
My view, based on the movie trailer only, is less generous. I don’t remember anything remotely comical or entertaining about those dark days and months as the ADM story evolved.
Every week brought new revelations from government, industry and company sources, most of whom refused to go on the record. Between them, truth seemed to be a work in progress.
It still is. For proof, go to Whitacre’s Web site and view both the movie trailer and the video excerpt from the Discovery Channel’s film on Whitacre. Two more stark pictures of one man never existed.
- Stark, too, is a fact I buried in last week’s column on the crack-up in dairy. That fact, that 70 percent of all U.S. dairy farms have debt – likely the most highly leveraged sector in American agriculture – came courtesy of July 14 House Ag Committee testimony by James Miller, USDA’s under secretary of farm and foreign ag service.
Miller went on to say that “(a)cross all sectors in agriculture, dairy ranks third in the average debt-to-asset ratio, behind poultry and hogs.”
Holy cow, the three enterprises that every farm family depended upon to deliver cash income and lift the mortgage year-in, year-out for a century are now the three most indebted in all of agriculture?
And folks wonder if, in our never-ending pursuit of efficiency and profit, we’ve lost our soul.
Heart and soul is more like it.
Guebert is a syndicated columnist from Delavan, Ill. Reach him by e-mail at firstname.lastname@example.org
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